ICICI Bank fixed deposit rates cut: Here is how much you will get now

In a big move that will not be welcomed by account holders, ICICI Bank has reduced its fixed deposit rates by up to 50 basis points. The new rates come into effect from Monday i.e. May 11. After the latest cut, the fixed deposits up to one year will now fetch 5.25% interest while those above one year will earn 5.7-5.75%, the private sector lender mentioned on its website.

The rate cut from ICICI Bank comes amid reports that banks are flush with deposits and reduced scope for additional lending in a locked-down economy. Last week, State Bank of India, the country's biggest lender, announced 20 basis points reduction in FD rates.

The maximum return being offered by the bank after the cut is 5.75% interest on FDs maturing between 2 years and 10 years to the general public. Senior citizens will get an additional 50 basis points interest - 6.25%- for this tenure.  Earlier, ICICI Bank used to offer 25-50 basis points higher interest on these deposits. 

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The bank is also expected to cut its MCLR, the benchmark lending rate, to which loans are linked. Last week, SBI reduced its MCLR by 20 basis points across all tenors, making EMIs of home, auto loan borrowers cheaper.

After the latest cut, SBI’s one-year MCLR, to which older home, auto loans are linked, now stands at 7.25%, down from 7.40% earlier. The revised interest rate was applicable from May 10, 2020. However, SBI borrowers will not be able to get the benefit of this MCLR reduction.

Meanwhile, ICICI Bank stock was one of the top losers on Tuesday morning. Asian Paints was the top loser in the Sensex pack, falling over 3 per cent, followed by HDFC duo, Maruti, ONGC, HUL, ICICI Bank and Kotak Bank. On the other hand, UltraTech Cement, Tech Mahindra, Sun Pharma, ITC and NTPC were trading higher.